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Great strides in communications initiatives

WHEN it comes to Communications Content and Infrastructure (CCI) in Malaysia, most of us are only concerned about whether we can get good mobile phone signals or how fast our YouTube videos will load.

But, said Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek (pic), the industry is a huge business that also encompasses television, animation and film production.

And it has become among the main contributor to the national income after the oil and gas, electronics and electrical, and tourism sectors.

“Malaysia’s Communications Content and Infrastructure industry is on track in meeting its RM33bil in gross national income (GNI) target in 2014.

“In 2012, the contribution of the CCI industry towards national income was RM30.7bil. Unfortunately in 2013, it dipped to RM30.4bil but in 2014 it is expected to surge to RM33bil,” he said during a briefing on Wednesday.

The GNI for 2014 is expected to be driven especially by higher capital expenditure by telecommunication service providers as they roll out 4G Long Term Evolution Technology for the Malaysian market, he said.

Development of the CCI sector is one of the 12 National Key Economic Areas (NKEA) of the Economic Transformation Programme, which aims to make Malaysia a high income nation and a global talent hub by the year 2020.

“The NKEA CCI, which focuses on communication infrastructure and ecosystem of content and applications, is crucial to Malaysia’s development into a high-income nation as it is both a growth industry and an enabler for accelerated expansion of the country’s economy,” Ahmad Shabery said, adding that it also represents the key infrastructure for the 21st century, with global studies suggesting a direct correlation between the penetration of communication services and GDP growth.

“Last year, the NKEA CCI achieved 102% of its targets spurred by achievements under its 10 Entry Point Projects (EPP),” he said.

Under the “EPP 1: Nurturing Malaysia’s Creative Content” banner of initiatives, two key indicators reported significant growth.

In 2013, revenue from export of creative content such as films and animation increased to RM565mil compared to approximately RM200mil in 2010. This year, it is expected to reach RM600mil.

The success of films such as The Journey which raked in RM17mil in local sales, War of the Worlds: Goliath which was awarded “Best 3D Animated Feature Film” at the 3D Film Festival in Los Angeles, and Ribbit which won the “Best Family Film Award” in the Niagara Integrated Film Festival 2014 in Canada, as well as Malaysians in the global music scene indicates that Malaysians are capable of developing content which are of international standard.

“While we focus on creating more value from Malaysia-based production, there is a need to increase the focus beyond Malaysian shores and capture the global market which is forecasted to generate revenue of US$158bil (RM506.63bil),” said Ahmad Shabery.

As such, in 2013 the Government implemented the “Film In Malaysia Incentive” (Fimi) to encourage international film producers to choose Malaysia as a production location for television, animation and film production. It offers an incentive of 30% on “Qualified Malaysian Production Expenditure” (QMPE) which refers to the spending of production companies within Malaysia, and the incentive is also provided to local producers for productions exceeding RM2.5mil.

During the year FIMI was introduced, the estimated total QMPE achieved about RM149mil, significantly higher than the RM20mil in 2011. This year, the QMPE is expected to increase to about RM200mil.

“The offer of 30% rebate is very attractive to film producers as not many countries offer such an incentive,” Ahmad Shabery said.

“The RM149mil QMPE in 2013 was an early reaction to the incentive. Within a short time span, we saw an impressive increase in the amount of film producers here.

“Also, the recent launch of the Pinewood Iskandar Malaysia Studio in Johor will ensure that there will be many more film producers to come,” he said, adding that production of the Marco Polo epic series there has already begun.

As for broadband services, Ahmad Shabery said that under “EPP 7: Broadband for All”, Malaysia’s household broadband penetration rate reached 67% in 2013 and now looks set to reach its target of 95% by 2020.

Moving forward, the High Speed Broadband 2 intiative planned to be launched this year will be a catalyst for Malaysia to have a broadband infrastructure that can support 100Mbps.

For “EPP 8: Extending Reach”, which is aimed at closing the digital divide between urban and rural areas and encouraging the use of broadband in non-urban areas, Ahmad Shabery said the government is currently addressing bandwidth requirements in line with a spike in demand.

“The issue of communication no longer arise as statistics showed Ma­­lay­­sia has a 143.6% mobile pene­tration, meaning a person could be owning more than one mobile phone each.

“With accessibility to mobile devices, the focus now is with the broadband service.”

As of last year, 835 new Kampung Tanpa Wayar (wireless villages) facilities have been created on top of the previous 3,844 villages.

A total of 424 1Malaysia Internet Centres were also in operation in the same period, he said.

“The supply of 2Mbps-4Mbps is no longer sufficient (and) MCMC is exploring a model that combines both limited free usage time and pay-for-service,” he said, adding that initiatives targeting the urban poor are also being planned.

In the earlier years of the ETP, implementation of this EPP was largely focused on the rural areas with less emphasis on the urban poor, he said.